Note: This post originally appeared on Inc.com, where Hireology co-founder and CEO Adam Robinson is a regular contributor.

Behind every great business growth story is a commitment to the people at the top. Anytime Fitness is the perfect example of what happens when the founders commit to creating competitive advantage through exceptional culture and people practices: for each of the the last eight years, Anytime Fitness has opened 300 new gyms, becoming the fastest-growing fitness franchise of all time.

In his new book, Love Work, company founders Chuck Runyon and Dave Mortensen credit their success to a decision made in the early days to build a people-oriented work culture. Runyon’s experience from his previous venture was instructive. “Like a lot of other businesses,” Runyon writes, “we cared mostly about winning new customers today. We didn’t yet understand the we were actually in a talent war to build the best team for tomorrow.”

Runyon believes that the first principal of building a great team is to understand the difference between “leaders” and “employees.” Leaders possess four unique traits – the traits that built the culture-centric environment that propelled Anytime Fitness to a hyper-growth global fitness brand with nearly 3 million active members.

1. Employers see employees. Leaders see human beings.

Runyon believes that companies too often get caught up in rule-making and policy adherence, which de-humanizes team members when life events happen. He tells the example of two sisters–both employees of Anytime Fitness–who exhausted their vacation time caring for their sick father. The father ended up outliving the prognosis, and when he reached his final days, the sisters were out of options to take more time off.

The company could have stuck to the official time off policy, but Runyon felt that was the wrong thing to do. He made an exception so that the sisters could be with their father, and the entire organization was better off for it.

“When your team feels stuck between a manual and a heart place,” says Runyon, “go with the heart.”

2. Employers see expenses. Leaders see assets.

Key to the early business model at Anytime Fitness is the fact that their gyms need only be staffed by one person for 20-50 hours per week. Runyon worried that they were getting caught up in seeing their team members as expenses that had to be managed, versus assets that could help lead the system to achieve a higher rate of growth.

Instead, Runyon started to shift his mindset by focusing not on minimizing labor costs for the sake of expense reduction, but instead looking for ways to invest in their talent base through tools and training. Viewing your employees as true assets to the business–just like technology and infrastructure–gets you thinking about ways to invest in your team that will provide a meaningful long-term return.

Runyon writes, “If we had adopted a culture that saw employees as replaceable pawns that silted profits, then we would have suffered the same fate as our competitors.”

3. Shortcomings vs Significance

Runyon recalls the time when he returned to his high school a few years after graduation to coach the freshmen basketball team. He noticed quickly that the better players had formed somewhat of a clique, and weren’t being supportive of the other players. Making matters more complicated, only ten players had tried out for the team, so Runyon couldn’t afford this rift. This type of negativity was going to hurt them over the course of the season.

He made the decision to utilize a defensive strategy that required a steady stream of freshly rested players; in short, everyone needed to be able to jump in the game and contribute. Runyon created a system in which all players were critical to their success, not just the starters.

“Getting people to feel their personal significance is a leader’s great responsibility,” says Runyon, “and people perform better when they understand how they can contribute. Insignificance breeds apathy and erodes respect. Significance creates a positive cycle.”

4. Cops vs Coaches

Most managers, Runyon argues, act like police officers: rewarded for correcting a negative event. He writes, “The problem is that when your job is to fix something that’s broken, it’s hard not to see the wrong in every situation.” As a business owner, Runyon says that’s an unhealthy mindset to have.

The best leaders are coaches, and have a totally different mindset towards team management. They understand that getting people to perform is all about investing in their development. Yes, that involves pointing out mistakes, and no, that doesn’t mean they’re handing out unearned praise.

“When you have a coach’s mindset, you’re honest, you offer balanced feedback, and you help your players accentuate their strengths while improving their weaknesses,” explains Runyon. “That’s what good leadership is all about. And that’s what empowers you to create a people-oriented work culture.”

Get Helpful Tips Delivered to Your Inbox To Build Your Best Team

Subscribe to Hireology's Blog